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Sergei Ponomarev: Non-standard solutions are needed to support business

The Government of Kyrgyzstan is preparing the third business support package. It is to be submitted before the end of June. Deputy Business Ombudsman of Kyrgyzstan Sergei Ponomarev told 24.kg news agency what kind of support do entrepreneurs currently need to overcome effects of the crisis.

According to him, the Institute of Business Ombudsman has said many times that non-standard solutions are needed in non-standard time.

«First of all, we need to look at business financing. Deferrals alone are not enough. Most entrepreneurs will agree with this. It is extremely important to change the rules of doing business — they must be very simple. We have the National Strategy for Sustainable Development, according to which we must enter the top 40 in doing business in 2023. But at the same time, we have a difficult tax administration and a high tax burden. And the latter leads to the fact that there is a fairly large number of businesses in the shadow,» Sergei Ponomarev said.

He also believes that it was high social taxes that led to the practice of paying salaries in envelopes. «Deputies announced at the parliamentary hearings that the rate of 27.25 percent is very high and it was proposed to reduce it to 20 percent,» the Deputy Business Ombudsman added.

If we talk about post-crisis emergency measures, then, in his opinion, it is necessary to think about stimulation of demand among consumers. «The population does not have enough their own working capital. At the same time, everyone started working, producing goods and services. And if they are not acquired, this will lead to overproduction. In this case, it will be difficult to say that the economy will recover. We need to think how to stimulate demand for at least a number of products,» Sergei Ponomarev said.

Another proposal that the Cabinet needs to make urgently is to provide tax benefits.

Today, many employers do not have means to pay their employees, especially small and medium-sized businesses.

Sergei Ponomarev

In addition, he believes that attention should be also paid to investments. At the same time, the Government and Parliament should consider not only external large players, but also internal ones — small and medium-sized businesses that create small enterprises.

«As of today, the issue of preserving jobs is also an investment policy, which the Cabinet needs to pay attention to. I would suggest certain preferences for companies that will create some kind of jobs in the near future. For example, if they create 50 jobs — they will be exempted from any tax for 12 months. If such a policy is implemented, then we could smooth out the bumps that await us in the near future. When it is impossible to preserve the existing jobs in full, it will be very difficult to create new ones, if the government does not propose any solution tools,» the Deputy Business Ombudsman said.